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"It's become a major barrier to people getting themselves in a position to find paid work," she said.

National Welfare Rights Network spokeswoman Maree O'Halloran said under current rules, people lose income after working for just two hours on the equivalent of the national minimum wage.

An adult on the Newstart Allowance can only earn $31 per week before their payment is reduced, she said.

"The failure to adjust, for years, the amount that a person can earn before their social security payment is reduced constitutes a serious work disincentive, especially in an era where much of the paid work available may be casual or irregular shifts," Ms O'Halloran said.

"We hope that the federal government can find the revenue for a phased-in approach to lifting the Newstart Allowance by $50 per week."

Australian Greens senator Rachel Siewert said anything short of a $50 a week rise was an "indictment on Labor for their misguided priorities".

"People on Newstart are skipping meals and missing out on the absolute essentials."